He claimed his attempt to improve the players against Bournemouth with a half-time team-talk did not work as well as he would have liked, and was grateful to Sterling for making the difference in the second half. After 14 matches, the undefeated City have collected 38 points from 12 wins and two draws, five points more than second placed Liverpool, who play Everton at home on Sunday.
"Unfortunately I was out of the Champions League match that I really wanted to play".
"I think it is too early to see how decisive it will be - we didn't finish the first round [of fixtures] but we play today and tomorrow one of Arsenal and Tottenham or both will drop points", Guardiola said.
"Also, Fabian Delph [on for the injured Oleksandr Zinchenko at left-back] helped us to find our rhythm and the second half was much, much better".
It was a landmark moment for former Barcelona and Bayern Munich boss Guardiola, who said: "My 400th win as a manager?"
The Hornets will know that they will need to be at their very best against Pep Guardiola's side to have any chance of coming away from the game with a positive result.
Mahrez stood out in a dominant City performance, for 85 minutes at least, and looks to have firmly settled into Pep Guardiola's side.More news: Elon Musk won’t be seen smoking pot in public again, says NASA
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City were camped in Watford's half for most of the first half and took the lead on 40 minutes as Leroy Sane chested home Riyad Mahrez's unsafe cross. The ball ran loose as Asmir Begovic came out to meet the Germany winger but Bernardo Silva was on hand to sweep home.
But the leaders restored order in the 57th minute as Sterling continued his mastery of Eddie Howe's team.
Callum Wilson of AFC Bournemouth scores his team's only goal.
Sane, 22, was outstanding in City's 3-1 win against Bournemouth on Saturday.
At Selhurst Park, Palace ended their eight-game winless league run at the expense of fellow strugglers Burnley.
"I'm always confident but always doubtful at the same time because we don't start well many times. They put so many balls into the box - they are so strong".
It seemingly needs a sleepy start to a game to jolt Manchester United's players into action these days.